Darknet markets have been a popular way for individuals to buy and sell goods and services anonymously on the internet. However, in recent times, many of these markets have suddenly gone offline, leaving users wondering why this has happened.
How many users does the darknet have?
Even more so alarming is that this number is on the rise, as of April 2023 this figure rose 200,000 to 2.7 million daily Dark web users," the report noted. Those most familiar with the Dark Web are those from BRICS countries – amounting to 28 per cent of those who cited being familiar with it.
Increased Scrutiny
Authorities Have Taken Down The Dark Web’s Largest Illegal Marketplace
One possible reason for the shutdown of darknet markets could be increased scrutiny from law enforcement agencies. As these markets operate in the shadows of the internet, they are often targeted by authorities looking to crack down on illegal activities such as drug trafficking and weapons sales.
These attacks are sometimes launched by competing markets in order to try to gain market share. Dream Market was forced to shut down in the face of DDOS extortion in 2019, with the attacker demanding a $400,000 ransom. ⁴ Child members on the family plan will only have access to online account monitoring and social security number monitoring features. Now, you can also explain to others how their shared Netflix password exposes them to fraud, or why the Dark Web is not just for criminals but also for dissidents and other people fighting for legitimate ideals.
What Is The Dark Web? What Happens There?
Technical Issues
- However, the operators probably realized the risk of exposure was too significant to continue.
- The U.S. investigation was conducted with support and coordination provided by the Department of Justice’s multi-agency Special Operations Division and the Joint Criminal Opioid and Darknet Enforcement (JCODE) Team.
- The trust Hydra commanded among users is obvious from how Kraken Market, which claims to be a project of former Hydra administrators, even designed its logo to make it similar to Hydra’s.
- Users on the darknet marketplace used cryptocurrencies such as bitcoin, Litecoin, Monero and Zcash to pay for illicit goods, with the operators receiving a 3% commission payment for processing sales via the platform.
- New Zealanders have a history of innovative solutions to the so-called “tyranny of distance”.
Total darknet market revenue for 2022 was $1.5 billion, a significant decline from $3.1 billion in 2021. Other marketplaces most likely channeled their efforts towards attracting former Hydra vendors and users, as most fraud shops gained their initial market share after the platform’s collapse. Many previous studies focused on drug markets or drug offerings in the darknet.
SMBs At Risk From SendGrid-Focused Phishing Tactics
Another possible explanation for the disappearance of darknet markets is technical issues. These websites are often hosted on servers that are constantly under threat from cyber attacks, leading to downtime and potential data breaches. It’s possible that some markets have been taken offline to address security vulnerabilities.
At the same time, malicious actors on the Dark Web adapt and innovate new ways to thwart identification and prosecution. The graph above shows both total darknet market revenue by year, as well as the total number of transfers to darknet markets, which we can use to roughly approximate the number of individual customers and purchases. Interestingly, we see that while revenue has already surpassed its 2019 total (again, with one month left to go), total transfers to darknet markets stand at just over 9 million — well below pace to meet the 2019 total of over 12.0 million.
Exit Scams
US Arrests Alleged ‘Bitcoin Fog’ Money Launderer
One of the most common reasons for darknet markets going offline is exit scams. In these situations, the operators of the market suddenly shut down the website and disappear with all the funds stored in users’ accounts. This leaves buyers and sellers high and dry, with no way to retrieve their money or products.
Respondents ranked vendor reliability (TF 2) as the second most important trust factor in illegal drug purchasing on the darknet. In addition, most of the respondents would prefer to purchase drugs online than in person. Both findings indicate that the perception of the reliability of markets and vendors determines potential customers’ decisions.
For almost 28% of all products worldwide shipping was offered and 50% of all products could be shipped to the US. The Onion Router or Tor is an overlay network designed to provide technical anonymity for its users. In Tor, packets between users are routed using a previously chosen path of at least three nodes from source to destination, called Tor circuit. Before sending a packet, the sender wraps it in multiple layers of encryption, using the public keys of the nodes to pass on the Tor circuit. Each node the packet passes then decrypts the outer layer to gain the information about where to send the packet next.
Market Competition
What is the revenue of the darknet market?
In 2021, total revenue of darknet shops (mostly drug dealing websites) was $2.6 billion; in 2022, it fell to $1.3 billion. Average daily market revenue fell from $4.2 million before Hydra's closure to $447,000 immediately after, Chainalysis says.
With the rise of new and more innovative darknet markets, older ones may struggle to compete. Users may migrate to newer platforms with better features and security measures, leading to a decline in traffic for older markets and eventually causing them to shut down.
U.S. law enforcement agents also used Hydra’s “Bitcoin Bank Mixer” to launder money in November 2021. The indictment further explains how Hydra vendors offered fake identifications, including passports and driver’s licenses, and hacking services. The platform enabled users to hire sophisticated hackers to target victims and gain access to their private information and take over online accounts. The Hydra marketplace allowed users to purchase a wide range of illicit goods and services, including illegal drugs, fake IDs and money laundering and hacking services. Nonetheless, threat actors adapted, with many choosing to move to the “RuTor” forum for communications and to decentralized platforms such as Telegram-based shops for drug advertisements, as well as offline sales.
Conclusion
While the exact reasons for the shutdown of darknet markets may vary, it’s clear that operating in the shadows of the internet comes with its own set of risks and challenges. Users should always exercise caution when engaging in transactions on these platforms, as there is no guarantee of safety or security.
When did Dream Market shut down?
The market also had accompanying forums, hosted on a different URL, where buyers, vendors, and other members of the community could interact. It is one of the longest running darknet markets. Administrator and prolific vendor Gal Vallerius was arrested in August 2017. The site shut down on April 30, 2019.
